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tv   Worldwide Exchange  CNBC  January 11, 2013 4:00am-6:00am EST

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welcome to today's "worldwide exchange." i'm ross westgate. these are your headlines today from around the world. shinzo abe is unveiling the country's biggest stimulus since the financial crisis. a cold snap helps push up consumer prices to a seven-month high in december. tech stocks are higher in europe led by nokia and s.a.p. after the stocks are expected to surpass the long-term target. stocks in the u.s. surprise the street by preannouncing earnings and unveiling its biggest corporate overall in a decade by cutting 4,500 jobs.
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jay you're watching "worldwide exchange," bringing you business news from around the globe. welcome to the last "worldwide exchange" of the week. plenty to get through today. kenny will be joaning us for the second half of the show today. she decided she can't miss out on any more. also coming up on today's show, wells fargo, the first u.s. bank to report fourth quarter numbers, we'll have in-depth analysis from 1130 cet. shinzo abe launches the biggest stimulus package since the start of the financial crisis. czech voters head to the polls. we'll have analysis at 10:50 cet. at 11:50 cet, we'll head out to chicago and take the pulse of the equity market. the s&p 500 reaches its highest
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closing level in five years. >> if you have any comments, we would love to hear from you. e-mail us, he's done it, japan's shinzo abe pulled out a $170 billion emergency stimulus package. he's targeted to boost gdp by as much as 2%. >> translator: board monetary policy, flexible fiscal policy and a growth strategy to boost private investments at the same time in order to revive a strong economy. >> a big chunk of the money will be spent on infrastructure such as railways, roads and tunnels and help rebuild assets in quake areas. abe says there will be new funds to start up more businesses and help larger companies invest overseas. let's bring in pico basser, head
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of research and economics at beijing. ever since we've seen effectively pressure on the bank of japan to raise its inflation target, the nikkei has had a really good run through the fourth quarter, up over 20%. continued now into nine weeks of continuous gains, which we haven't seen for some time. can this continue? >> yes, i think we can. we have the right policies in place at long last. i think the fiscal stimulus is very much the right thing to be doing. in that case, i was on bernie's show towards the end of december saying this is required and the delivery both in terms of a fiscal stimulus that is large, but also through pressure on the boj to achieve 2% inflation
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target. if the boj does indeed work in that direction, then i think this is really the last opportunity for japan to -- to really step back from the abyss of an unforeseeable pile of debt. and i think they're moving in that direction. the longer shinzo abe can keep the pressure on and get the right policies in place, the better it is for japan. evidence shows, in fact, that if japan achieves positive inflation, you get a sharp improvement in the primary fiscal balance, primary fiscal deficit moderated to gdp in the second period. it's possible for japan to do that. if they really aim towards getting nominal gdp growth and at a proper inflation target of 2%. >> yeah.
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he also would say the nikkei was wording whether the bank of japan should consider maximizing employment as a policy goal and sort of adopting the fed there. we saw the yen result. is that sustainable? and if the yen continues to weaken more, i would imagine that would make you more bullish on japanese equities. >> oh, yeah, it makes me bullish about japanese equities and asian equities. the yen carry trade becomes all the more attractive. i think the yen is heading towards 95. by tend of this quarter. and subsequently, the yen carry trade is really quite attractive. and you have qeplus with the fed focused on ensuring that it buys 85 billion of securities every
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month. >> all right. if you can stay there, we'll come back in just a second. we're going to talk about china where consumer prices climbed thanks to a cold snap and higher food prices. a bit higher than forecast. it's still comfortably above china's 4%. food prices for december are down 1.9% as we continue to weigh on raw material costs. how does this data pick in with your view, piquay, of china? >> well, actually, i think it's a good number. it's a good thing that inflation is beginning to tick a lot unwards. it reduces the temptation for china to easy monetary policy. as the new leadership gets into place by march 10th, i think it's important for china to focus on the medium term. and the medium term, really, is going to be a period of moving
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away from investment-led growth to a much greater level of consumption. that is much easier said than done. but it requires that china needs to slow down credit xwroeth over the next couple of years, ensuring that it has a couple of years of m2 growing slower than nominal gdp to compensate for five years of excessively rapid growth and credit in m2. so that policy framework would be helped by inflation, surprising a little bit on the upside. and so i look at this number as really quite positive. yeah. i mean, the initial market reaction means that there's less to go for any easing of monetary policy. so i guess that's why there's a slight negative reaction to it. but you don't think that's anything to worry about? >> no, i don't think that any actual move by china towards
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further easing of monetary policy is actually good for china or the world. what the world really needs from china is an economy that is robust. and we saw evidence of increasing robustness in the economy particularly with the import number yesterday. the imports picking up suggests that the chinese economy is seeing a strengthening of domestic demand. >> how about the restocking? pardon me? >> quite a bit of restocking in that trade number. >> well, yeah. i mean, there is a little bit of restocking. i need some help with this. but -- could i have some help? yeah. there is an element of restocking there, but the important point is that exports are doing rather well and exports and imports are normally strong. so the fact that exports are beginning to do well and are likely to do a lot better in the
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march to june period this year means that there is greater scope for china to focus on the medium term reform as spengts. if exports do well, then there's less need to stimulate domestic driven growth. >> okay. we'll get someone to sort out your ear piece. while we do that, let's remind you where the u.s. markets are. s&p up at a fresh high, 1,472. 2 glass dak up .5%, the dow up .6%. we are going to get into a bit of a debate about what happened with the debt ceiling. there we go, piqu why. hopefully we've sorted you out. i want to get your view on the nikkei up at fresh five-year highs as we go into the new year. we have to get into discussions about the debt ceiling.
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>> well, i think the debt ceiling will cause some enhanced volatility from the february the 10th to march the 1st. we're likely to get a midnight solution on february the 28th. but the point is that i think the most difficult aspect of the negotiations was the issue of a tax increase. the republicans hadn't vote -- no republican congressman had voted for a tax increase in three years. 85 house of representatives members and the majority of the republican senators bothed in favor. so i would say that this suggests that the -- on fiscal issues is now a thing of the past. i mean, it's saying something quite strong, but i think we are much more likely to get a reasonable solution on march the 1st than seems likely until the
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middle of january the 1st this year. we're likely to get that solution. there will be a period of volatility for about 20 days in february. but once that's out of the way, i think all signals are green for risk assets this year. >> thanks for that. now let's get you up to speed with where we are on european global equities. to the up side, around about five to four advancers starting to outpace the declines in the dow jones stoxx 600. ftse 100, pretty flat, up 3 points. xetra dax up 6 points. the cac 40 is absolutely flat and the ibex is up 12 points. we can continue to keep our focus, though, on what's going on with the debt markets. we've got an italian auction coming out today which is going to give us a bit of a steer.
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we're looking up to 3.5 billion. we expect auction yields to come down to a level we haven't seen since -- 4.18% in italy -- since around 2010. yields in italy, the costs come down to three-year lows yesterday. a pretty strong spanish auction yesterday. keep our eyes on this. so the currency markets are concerned, plenty of focus on dollar/yen. let's show you where we stand at the moment. 88.97. we have this morning been up to 89.35. euro/yen higher, stipulating around the 118 mark, as well. euro/dollar had big moves yesterday, posting with the spanish auction mr. draghi and the ecb coming out saying it was unanimous about no interest rate cuts whereas in the previous
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month there had been some discussion about that. euro/dollar, 11.3260. let's bring you up to speed with the asian trading session today as they wrap up the week. li sixuan joins us for the first time today. >> thanks, ross. japan was a clear outperformer after shinzo abe unveiled his massive stimulus plan. and the nikkei gained 1.4% today. just to put it into context, this index is up for the ninth straight week, its longest winning streak since late 1988. shares of stocks surged to nearly 5% after the operator of clothing chain unicore raised its full year guidance. but hotter than expected cpi data from china put new pressure on the shanghai deposit. there will be more curbs to taint housing prices. meanwhile, weakness in china's
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blue chips dropped the hang seng lower. but hsbc did lend some support after the bank said yesterday that the plan to sell its stake to citigroup was still on track. korean automakers took a hit after the korean won climbed to a 17-month high. the kospi finished lower by .5%. in australia, miners lost out as a cyclone affected their operations. the asx 200 finished down .3%. it's the first weekly loss in eight weeks. infosys trading marginally in the green. shares trading nearly 16% after the software company posted better-than-expected earnings and raised its sales forecast for the year. more on that with our guest later on in the show. thanks, ross. >> we'll keep you in that later on. still to come, hong kong has new ipo rules in place.
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will the reform give them a hand up in the global equity rates? what are you doing? nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office.
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google search results in europe look set for a change.
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the eu muniea explains his investigation into the search engine. he's convinced google is profiting by diverting internet traffic for certain businesses. american skres announced better-than-expected earnings for the fourth quarter. it saw revenues of $8.4 had billion. it will make big restructuring changes which includes 5,400 job cuts throughout the quarter. shares dipped in extended hours of trading the. and the fate of superman remains firmly with warner brothers and dc comics after a decision from a california court. the court of appeals said that the rights for the man of appeals should not stay with the cocreators. the decision means that warner can release this summer's new superman reboot without fear of legal challenges. so we're watching today.
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who is your favorite hee roar? superman, ironman, super mario draghi? whoever you like, e-mail us, tweet us. my produces asked me who i thought my favorite super hero was. it took my a while to think about it, but then i thought hong kong fooey. there you go. many happy memories. talking about hong kong, hong kong is set to influence sweeping reforms this year. the move is seep as a bid to attract high quality companies as it seeks to try and become more competitive against rivals in new york and singapore. mark is still with us. good to see you. are these rules going to have the desired effect, do you think?
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>> i think it's -- the rules are good. and i think in the long run, they will have the desired effect. i think the idea really is to continue to attract really good companies. but i think at some point it would enhance the overall quality and the standard of the stock exchange and i think in the long run, people will be attracted to think that the exchange is definitely a more credible one. so i think in the long run, they will have the desired effect. >> what in particular is a stand out improvement? >> i think the combination of some of the rules would be important. i think the exchange has never made it a doubt that they place a lot of emphasis on the sponsor's work. and sponsors are basically the financial institute to manage the deal and sign off on the deal. so i think a lot of the reforms have been targeted towards how the sponsors carry out their duties. when does a sponsor come in? how do they involve themselves in compare he prosecute paring
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the company to become the most enlisted. at the end of the day, if the perspective that goes out to the street contains untrue statements and the sponsors were aware of this and yet they let the prospectus go out, they could face criminal sanctions. i think that's the most worrying thing. and i think from the investor's perspective, they can rely on these sponsors who know the company and rely on them to do their work and help the company to improve their internet compliance measures and essentially bring the company to become a listed company that an investor can have confidence in. >> as you seem to be suggesting, we've pushed the hong kong market is being guilty of pushing how immature deals, immature pricing. >> oh, i think it's not -- it hasn't happened a lot, but i think there have been isolated cases whereby deals have gone out and clearly the sponsors have not done their duties.
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i think the recent hong kong specs was a good example. i think the sponsor fell short of the required standards. so i think the exchange, that was one of the big factors that prompted the exchange to look at the current regime a lot more closely and really come up with these recommended practices. again, i mean, the criminal liability point will take some time to implement because it does need to go through legislation. having said that, while the rules would only come out, in fact, in october later this year, a lot of the banks when the rules were first muted, they took a lot of steps to improve their internal compliance measures, to improve their internal processes. so i think we have seen a lot of banks starting to take these changes very seriously and we do see that the amount of work that they put in as improved a lot over the past few deals. so we are seeing an increase in the level and hopefully that will really ensure that the low risk and having companies that are really pushed out immaturely. >> mark, how do these rules
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compare with some of the competitors for the hong kong exchange around the world, including some in asia like the sgx as well as those in new york, london, tokyo on, etcetera? >> well, i think a lot of the other stock exchanges, especially in the region, i think in singapore, singapore has taken a slightly different approach. singapore has done sthings like raising the standard in listing in the sense that you have higher qualificationes and thresholds before seek ago listing in singapore. so i think they've taken slightly different measures. some of the other exchanges, like in new york, i think it's the nature of the u.s. regime itself. i think they have a lot of protect in terms of litigation by shareholders and that is a big concern. i think that hong kong is slightly different. i think they've tried everything. but when this whole inflex of smaller, privately run companies coming to the market, i think
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this is definitely a lot more important. and i think, you know, we have seen a lot of our competition in hong kong remaining one of the top destinations in the i think there's always a tendency for companies to say, look, we'll try to list in hong kong. so, you know, i think there will be sort of like these implement that these rules act as a control to make sure that, you know, remind the banks to do their work properly. >> okay. >> i think a lot of the banks are doing it. >> thanks for that, mark. piquay, we'll he see you in a little bit, as well. the tallest building in the uk, the sharp, has opened its doors to the paying public. our very own tom mcquestionzy took one of the elevators to the viewing level.
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at more than 300 meters, the shard dominates london's skyline. doors open to the paying public on february the 1st. organizers are confident they can attract a million plus visitors a year. >> london is, you know, blasting into the 21st century. i think london is accepting to new thoughts ask new technology and from what we've seen from the people of london, they're embracing the building. we have some deextracters, but i think on the whole the building is popular. >> the highest viewing points on the tower, the views can be seen up to 40 miles. even the best architecture in
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the world can't mitigate the weather and today it's a little more wet than wow. building europe's largest building was nearly ended back in 2009 due to lack of funds. house ago five-star hotel, world renown restaurant and exclusive residential apartments, the architects dub it a vertical city. london is one of the key cities in the world. one of the things that was always lacking in the city was the ability to come up with a tall building and look down on the city in the same way as the eiffel tower, you can see paris, you can see new york, and this is a 21st century layer that has been added to the city. this is a sign of our times.
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>> it will have to be the highest toilet in london. talk about a loo with a view.
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these are the headlines from around the globe. weakness in europe continues to weigh on germany. the economics minister warns gtp may have slowed sharply in the fourth quarter. bank stocks stayed higher lead by nokia. and s&p says it expects to surpass its long-term revenue target. we've got industrial production numbers out for the uk in november. manufacturing output weaker than expected, down .3% on the month, 2.1% in europe. it was forecast down .5%. october manufacturing advised lows to miners 2% on the year, as well. november industrial production up 3.3% on the month, down 2.4% on the year. it was forecast up 1.3%. so these figures, both weaker
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than expected. oil and gas extraction posting the sharpest monthly rise since 1968. but we did have an out age in the previous month figures. so you have to -- i think it was a blizzard in the oil field. so, yeah, oil extraction boosted after maintenance. so you have to strip that out from the previous numbers. the point is, we had that rise and yet these numbers are still weaker than we might have expected. so sterling, no surprise falling down to the low point of the session, 161.31. it will all to the pmis that we've had. we've undoubtsedly gone back into negative growth in the fourth quarter. joining us with his results, neil mackinnon. would that be the right version? >> i think so. very disapointing number peps not really a surprise. the pmi numbers showed similar
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things. if you look at the gdp numbers, the economic growth numbers, we never got out of the recession in the fist place. some 15% below its precrisis tren. these are slightly worrying numbers. i'm not entirely sure what the bank of england can do about this in terms of listing monetary policy over and above what they've already done. >> i was writing about this earlier this week. we were going to get headlines talking about triple digits. we were going to get a bank of england that wasn't going to be able to respond because of qe and appeal because, actually, inflation was ticking higher. which means we're going to get more pressure on real take-home pay. and the chancellor might have more reason to miss his deficit targets because he's not raking in tax revenues. all of which i wonder how much pressure is that potentially going to put on sterling, bearing in mind it might go to
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the front of the ugly queue. >> the thing some thought, looking at the currency crisis, and that's way off the mark. we've had quite a sizable depreciation in sterling during the financial crisis. bank of england still talks about the need to rebalance the economy. but i think it's all pretty worrying. you mentioned a take home pay in the bank of england. since 1920, it's rationalble. there is no soop of any improvement. people are still talking about being in a job, they've lost their job. >> there is the one bright spot, there have been jobs in the employment level. >> well, you say that. and i do wonder, there's no widespread evidence that the city, for example or sterling wab towards tend of the year, it's very, very difficult for people to get rehired. i think it's a permanent
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reduction in the city's head count. but outside of the city bubble, i think also people are still worried about the jobs. the housing market outside the prime london hot spots is still pretty weak. i don't think people are especially confident about the near term outlook. so it doesn't look encouraging. i'm not sure what the bank of england can do, open up a -- for lending scheme which does seem to be sharing some positive results in the recent credit conditions. >> more unconditional -- >> maybe. i guess the two key things that are really holding the uk economy back, one is the eurozone crisis, the recession that is taking place. we saw record unemployment numbers which seemed to -- as far as mr. draghi is concerned, he's oblivious, which is quite remarkable. that is clearly having an effect on our trade relationships with the eurozone. obviously, continuing tightness of fiscal policy. it was also a factor, of course,
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the government faces this dilemma. how does it get its wiring down without oversqueezing the economy. so it all makes a very difficult outlook to the uk economy, unfortunately, over the next few months. >> stay there, neil. let's check in with where we are with the european stocks t moment. the ftse 1100 was flat yesterday. the cac 40 is pretty flat as well as the ibex, as well. on the bond market, we're keeping our eye owes italy today. we're keeping our eyes on the three year. the yield is expected to dip under 2%. on the currency markets from the euro just hit a nine-month high against the pound at 82.30 pence and sterling against the dollar, 1.6124. the other standout today has been 88.90. we have been up to a fresh 2 1/2
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year high of 89.35. we've got that stimulus package from abe plus comments that maybe the bank of japan could consider maximizing employment, as well. you focus on italy, as well, the costs are expected to fall today. they've got 1.5 billion in five-year floating rate notes to come. those yields should be dropping below 2%. and xwerm germany's economic performance declined sharply according to estimates by the economics ministry. the government blaming weak european demand and says it expects the economy to revise significantly this year. piquay is back with us in singapore. he will probably jump in, as well, on this. you know, you mentioned the poor economic data out of europe. the ecb seems to be fairly focused on what the markets are doing. the borrowing costs are coming
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down for italy and spain and they still are going down. i expect them to fall again today for italy. that's good in terms of there's less stress, but it's not feeding into anything on the hard action. >> that's right. what struck me listening to the ecb's press conference yesterday, certainly the ecb have done a lot to sort of try and do something about the fragmentation of borrowing costs. that was a concern for the ecb during the second half of last year. we are finding a break up premium for the eurozone being priced into bond markets. it's difficult to tell. they continue to muddle through, kick the can down the road, whatever you want to call it. but what struck me yesterday was to say that conditions within the euro swoen is stabilized. but this comes in a week in which record levels of unemployment in the eurozone of 11.8%, it strikes me that the ecb is putting the requirement
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through the banking system before the unemployed and i think that is senseble. i think the recession continues in southern europe. >> fiscally, this is clearly taken the position, haven't they, that so save the euro project, they will do it on the back of the average working man in europe. they will pay the price for keeping the currency together. >> that's one way to put it. to use an old phraseology, unemployment is price worth paying. i'm not sure the politics of all this is going to work out the way they think it would work out because we've seen increasing social political tensions. and i think that frankly, they can't ignore what goes on in the real economy. they can't ignore what's happening with regard to the employment. i think it's dangerous if they do. and if it's seen that they are putting the needs of the banks fist, which i think they are, and, of course, we don't want the banking system to be liquidated. but neither do we want to see
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the eurozone economy continue to remain in a recession this year, next year, and for unemployment to become much more than a political and social herb. >> piquay. >> neil, you said earlier that the pound, the sterling is likely to hold up and won't have any sort of crisis. but, you happen, you've got a situation where the europeans are moving towards banking union. they have provided a substantial loan package for greece. and so the risk these appear to have diminished considerably. whereas in britain, the uk has been really the worst performing economy since 2007. if you look at nominal gdp growth and real gdp growth, the uk has really underperformed and is that going to be a question mark over the continuance of austerity on the one hand and the level of the pound? >> well, certainly they
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anticipate domestically about whether the coalition government will continue with its austerity measures. the government seems as though it wants. as i mentioned earlier, it's a dilemma. it's not mutually exclusive. you can't ignore the scale of the deficit and move on to some sort of fiscal stimulus package where i think the uk government should have really avoided raising taxes in the first instance. and i also think it should do a lot more to promote investment, even if that is at the expense of current consumption. but, yeah, it's easy to sort of try ask joef do all the gloom and doom in the uk. as far as the eurozone is concerned, sure, there may have been reduced tail risks. but they might have won the battle, but they haven't won the war. there's deep problems in the eurozone. as fas as the uk is concerned, having our own currency, having our own monetary and physical policy is a good thing.
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so, yes quarterback for sure, we go our own way. we have a choice of the terms and conditions of our own policy. that's why they are stuck in recession and why europe is stuck in a depression and why unemployment is a much bigger, bigger issue in the eurozone than it is in the uk. >> thanks for that. kneel mckinnen, chief economist. the baj of korea did drop a hint today. chery, live from seoul, what was the hint? >> hi, ross. the bank of korea kept the rate steady today, but lowered the growth forecast for this year down to 278%. this is mostly because of lower corporate investment with weak
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demand and uncertainty coming from out of the united states. it looks like the central bank wanted to have more room for policy action down the road. easing inflationary pressure is another factor here that has a cut in the fist half of this year. the bank of korea cut the annual inflation forecast for 2013 from 2.7 down to 2.5%. but there were some market observers who thought a sharp fall in the yen and the sharp rise in the korean won would by the way close at a 17-month high could lead to a cut this time for faster growth, especially among exporters here. but the government says that the impasse of rates on corporate earnings appears to be smaller than in the past. he says there are more exporters that are not compete, pricing any more like a tech phase here in korea. ross, back to you. >> all right, chery, thanks for
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that. if you're looking for a stimulus story, the big news came from the japanese side from prime minister shenzo abe. let's get more on that. >> hi, ross. the japanese government has approved a new emergency economic stimulus package worth $117 million to boost the economy by boosting inflation and creating more jobs. teague with local government and private sector spending, the package will come out to $240 billion. it focuses hefdly on disaster recovery such as repairs of quake resistant roads, bridges and tunnels. it will provide more aide to smaller businesses. at a press conference today, the prime minister shinzo abe said this should create 600,000 new jobs. the package will be partly financed by -- >> okay.
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i'm sorry, we've lost her in tokyo. shares are up today after posting a better than expected third quarter profit of $334 million. extra heavy knew from its unit with loads and holings helped to contribute and the second biggest software services provider raised its sales forecast for the year to nearly $7.5 billion. the company has more than half of its revenue coming trt american market. for more, the outlook for the other tech players in india, we're joined from singapore at the ecc practice in asia. thanks for joining us. what have you learned from what is being said? >> i think it's very good for infosys. we're looking at the levels of 14%, that was the prediction by nascom.
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apart from -- i think most of the players are trying to move away from the dependency on the u.s. and europe lines. they're trying to move towards high end services. they're trying to move away from the core outsourcing processes and offering some kind of service to the high end clients now. so i think they're moving forward in 2013 with some of the compani compani companies. >> how easy is that going to be for them to do? >> not easy for them. it could be very complicated. and considering that the traditional modern -- has been
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more or less a complicated game. this will be kind of challenging, definitely. >> yeah. so, look, all in all, how is 2013 going to be compared to 2012? we have u.s. elections, i.t. companies, business from the u.s. there's a lot of uncertainty over the fiscal cliff. has there been a withdraw of investment but maybe it will bounce back? albeit, you've still got to get through debt ceiling and other negotiations. >> i think 2013 compared to 2012 and 2013, 2013 will be more positive. for the election year in europe and considering most of the companies infrastructure is more than 50% of the exposure to the u.s. market. most companies who have their renewal budgets, they tried to push it to the next year, the election budgets. so most companies do have good exposure to the u.s. i think 2013 is still better
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than 2013 compared to 2012. >> there's a lot of talk about on-shoring of business by the u.s. certainly with regard to manufacturing, you've got the natural gas boom in the u.s. which is making it much more attractive for the u.s. to manufacture stuff on-shore as well as 3g, 2g manufacturing. are there any factors on the software side that can have an impact on some of the offshoring that has occurred to india over the past 15 years. >> fundamentally if you look at it, europe is still not very intensive. the u.s. is a market which will need external support. i don't think outsourcing from u.s. companies will change because of existing revenue. but the factor, whether they
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would have new companies or add to the philippines, that might be a challenge. but outsourcing, i think that continues. i don't think u.s. companies with just do it in house. >> but what about regulatory and tax risks in india? that has been a concern in many other sectors. this sector has benefited enormously from the software technology scheme and so on. is that goc to be more of a challenge as we go forward? >> i don't think so. i think the government has been very positive about the i.t. sector in general. the i.t. has been quite -- in terms of the i.t. companies. from telecom, there has been a bit of concern. they've come under the huge tax
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outlay. so there has been some over other sectors. but the government is still very operate ronnizing. i don't think that changing. he think it in the short-term. >> thanks for that. >> good. thank to you. >> you guys have great evening. phil cruz has found himself in a war of words over whether the fed's monetary easing is giving away to easing. the flu virus is expected to take a major toll on the u.s. economy which experts suggesting the costs for this year's outbreak will far surpass that of last year. and if you're looking to drown out the case of the flu with cognac, we'll take a look at the liquor that might just do
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the trick. all on those stories and plenty more at still to come on today's show, the czechs head for the polls to elect a new president. find out how one is giving the establishment a run for their money.
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presidential elections are set to take place over the next couple of days in the czech republic. candidates for these former prime ministers, but the direct contest has given rise to a surprise third place candidate, the heavily tattooed composer and professor vladimir franz. joining us for more, eric managing director and founder of caterpillar. good to see you. >> good morning. >> thanks so much indeed for joining us. how key are these elections for the likes of you guys that are investing into the country? >> for foreign investors, i'm not sure the impact of the elections are going to be very big.
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i think with clouse leaving office, being a euro skeptic, the new contenders out there being more eu friendly and looking to integration into the eu it's going be a better impact overall. perhaps it has more impact on the local investors, people that are born in those markets. but in terms of the business community, i think it's more the eu integration and cooperation that will be important. >> yes. let's look at the runners up. the third place guy who is -- i mean, it is an interesting track. how much of a chance has he got of upsetting the front runners? in i think he's going to have a meaningful impact. he has already. i would never underestimate the power of artists within the czech republic. people regard them very highly. he's giving it a good run. what's most important is he's getting the younger people out to a vote. if this goes off to a runoff, the question swb will those younger people go out to the runoff and how will that impact
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those two final people? >> it's sort of an interesting play. and i don't know what his -- do you know what his political views are on things like europe and is he pro european or -- >> well, i think it's hard to believe anybody's artist's view in general about politics because they have very specific and also very general views. i think that's he's not a euro skeptic like clouse was, but he hasn't really, i think, unloaded all of his sort of critical ideas into his debates and into the market. >> what are we offering, a sense of returns and are you allocating fresh capital or not? >> absolutely we're allocating capital. i think that the seeds of the european session have, you know, referring to harvester and all the countries in central europe, poland, czech, slovakia have been strong markets for their
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automobile economy, you see those continue to go grow. at the same time, there's the banking sectors with leverage over real estate. there's a big gap between the banks see values and where the investors see model. in our business model, we're trying to support the deleveraging of the banks. but i think the markets in general are continuing to demonstrate slow, steady growth. and we think over the mid to long-term, it's compelling. >> in europe, it's very much dependent on what happens here. >> of course we're exposed to it. but the fundamentals are extreme to look at. if you look at the debt to gdp ratios, unemployment, eurozone employment at 11.7% or something and you look at central and asian europe, and is they're well below that.
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because they're a young market and a growing market, they're not facing the same problems and the same issues that western europe is. it's slow and steady, they're growing and developing. >> thanks so much for joining us, eric. earlier we asked you who is your favorite super hero? a number of you have responded. underdog, rocky and bullwinkle. don't forget scooby-doo.
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hello. you're watching "worldwide exchange." here are your headlines today from around the world. american express preannounce us fourth quarter earnings and unveiling its biggest quarter overall in a decade, starting by cutting 5,had 00 jobs. sap is expected to surpass its long-term revenue target. shinzo abe fuels the japanese economy, unveiling the country's biggest emergency stimulus since the height of the financial crisis. industrial numbers push the pound to a session low.
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>> all right. you're into the the last hour of "worldwide exchange." kelly was set to join us for the last hour after being on "squawk box" this morning, but she has been detained. very disappointing for me and i'm sure for you, as well. the s&p is up at fresh five-year highs, but at the moment, we're down about 17.5 points on the dow and the futures, nasdaq is down around 5 points on the futures and the s&p 500 is down around 1.5 points. it is a fresh five-week high, the high since december 2007 is where we'll be starting. the ftse global 300 absolutely flat as are many of the uran indices. trending down 4 points.
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the cac 40 is down 16. ibex is down 18. we keep our focus on italy. ten-year 4.51. we'll be keeping our eyes on the three-year today. three-year auction coming up, 3.19%. we are expecting to raise up to 3.5 billion maximum. we're looking for yields to dip under the 2% the market. remember yesterday, in a 12-month t-bill auction, it's near three-year lows to italy. just one of the reasons why the euro continued to rally as it did going through the ecb press conference. but it was unanimous. no discussion about anything should happen with rates. euro/dollar, 1.3265. the yen has been much weaker today. not only do we have that stimulus package out from japan. but those are perhaps reasons to think that the bank of japan should adopt an employment target, as well. that pushed dollar/yen at one
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stage to a fresh 2 1/2 year high. it got to around about 89.35. they've dipped just below the 88.91. euro/yen, firmer just below the 118 mark. and weak industrial manufacturing production numbers out of the uk, better than spec'd, suggest we might well have gone negative in the fourth quarter. the triple digits writers will be polishing up their headlines for nap sterling/dollar back down to 1.61. that's where we stand here in europe. sixuan joins us out of singapore for the last time this week. >> thanks, ross. asian markets wrapped up the week on a mixed note. japan was the outperformer after primary shinzo abe unveiled his massive stimulus plan. the nikkei gained 1.4% today. and very much the index is up for the ninth straight week, its longest winning streak since late 1988.
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sharp shares jumped nearly 13% today on reports of additional lows from two lenders. but the higher than expected cpi data from china put new pressure on the shanghai composite ending lower by 1.8%. property counters were among the big losers on fears there would be more -- to take housing prices. meanwhile, weakness in mainland blue chips dropped the hang seng lower by .4%. it did lend support after the banks said that the plan to sell its stake in ping an insurance to thailand's citi group was on tract. south korean automakers were on reverse after the korean won finished 17-month highs. in australia, miners lost ground as a cyclone affected their operations. the asx 300 finished down .3%. its first weekly loss in eight weeks. the index sen sense finished marginally in the red.
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but shares of infosys soared about 17% after the software services company posted q3 earnings and based its sales forecast for the year. back to you, ross. >> sish woman, thanks for that. let's take a look at some of the other stories we're watching today. american express posted better-than-expected earnings for the forty quarter. am ex also says it will make some restructuring changes, which include 5,had 400 jobs cuts throughout the quarter. chevron says it expects higher q4 earnings. chevron declined to offer earnings estimates. the company shed its report full earnings on february the 1st.
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and in the financial times, the ongoing investigation into google has been explained. he suspects google is profiting by diverting internet traffic to certain businesses. if that is the case, it would mean google is abusing its dominant position. barack obama officially nominated jack lew to replace timothy geithner overnight. speaking from the east room of the white house, the president made it clear just why he made this move for the post. >> over the past year, i've sought jack's advice on virtually every decision i've made from economic policy to foreign policy. and one reason jack has been so ekive in this town is because he is a low-key guy who prefers to surround himself with policy experts rather than television cameras. and and to hear who has been
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nominated for obama's cabinet, senator john kerry to replace hillary clinton as secretary of state, jack lew to replace timothy geithner and chuck hagel to as secretary of defense. tinny, good to see you. happy new year. >> happy new year to you, too. >> nice to see you. what do you make of the reshuffle? >> well, they are not surprising choices. there's a lot of discussion about whether obama's second term means changes or continuity. i'd use another key term which is consolidation. i think his cabinet are loyalists and insiders. they'll help move forward the agenda. there isn't a lot of change here. >> hillary clinton is going. >> again, i think you will see the perpetuation of the policy priorities that we've seen in
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the first term. in fact, many would say that the obama administration's foreign policy have been one of its most successful areas. he was long fit for this post, kerry, that is. >> you have set this up on raising the debt ceiling, wider agreement over getting any kind of grand bargain. where do we now go? he has his new team. >> not yet. they need to be confirmed. >> they need to be confirmed, obviously, but as we head towards a debt ceiling which has to be raised by the middle of february, effectively. >> there are quite a few new seens to do with the budget, continuing resolutions, sequestration only postponed. all of this is exactly what we expected at year-end. so the fiscal cliff was so 2012, 2013 is all about the budget.
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more or less, you've got the same actors in place making the decisions in congress and in the white house. jack lew is himself a washington insider. he's well known to congress and he's there to shepherd the process along. he's not got the wall street experience that a lot of people on the street might be hoping for. but he really knows how to move the process forward. >> is that exposed to weakness? being an insider on the political front, but obviously having no external wall street experience, how much weakness is that, do you think? >> i think there are limits to what anybody can do does she. >> it's a round about, isn't it? >> but jack lew has one big advantage and that is that he's coming into office with the u.s. economy expanding. >> which is good news. tina, thanks for joining us. just to remeepd you what is on today's agenda in the united states, wells fargo is the first
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of the u.s. banks to report earnings this season.thely during that hour, best buy is going to be in focus, as well. we wanted to look at the governance reform. still to come, all the latest on the italian elections when we come back in a few moments. ♪ [ male announcer ] don't just reject convention. drown it out. introducing the all-new 2013 lexus ls f sport. an entirely new pursuit.
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we're going to be discussing italian auctions. just to remind you what we're looking for, 3.5 billion in three year notes today. that yield should be dipping under 2%. we'll get those results out fairly shortly. as soon as we do so, italian elections next month. we've got berlusconi on one side, pasani on the other hand. the monti interest party is kind of messing up the rates. >> markets are hopeful that monti will return to government, but his new centrist government
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is running at 12% in the polls. that is the high end of the five-star movements led by the former comedian. so there is some robe to be hopeful that a coalition government would include monti's centerist list, but we've always said a technocrat is not a politician. and the fact that monti has used his political virginity, as has been said, may actually hurt him. >> and what is the impact having on pasani, as well? if he has to distinguish himself from monti's policy, does that mean he has to go to the left? >> they're trying to reassure the italian poll lagz that they won't hit too hard on austerity
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and yet they're continuing with monti agendas. that is a vote for the imf to come to italy before too long. >> i can't imagine -- how is that being framed in italy at the moment? because the idea would be if you maintain the monti reforms, which are not very popular, clearly, you may not get the imf. are people having to choose to something they don't like and something that could be a much worse direction? >> i think they're trying to choose, politicians in europe don't have much room to maneuver, so they include a populist phrase on either side, the left or the right. what you see in italy is the tensions between the north and the south. this is going to come down to local and regional politics. we have three bellwether states or reasons to watch in italy.
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they are all in the richer north. sis lynn and the campangna in the south. these are going to be very south. one of the big questions i have in trying to think about what italians will do is if they'll follow the trend in the other peripheral countries. it's too risky to experiment with political alternatives. >> we've seen yields come down primarily as a response to mario draghi in the program which hasn't done anything. it's just sitting there in case people need it. how much of it is down to that and how much is down to any meaningful reforms that monti has carried out? >> any reforms that mon at this was able to carry out is some years back and his agenda is clearly unfinished. in fact, you can say that the moment has passed.
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we've seen that the market is underpricing political risk because with so many parties competing with the elections called at such short notice, there's a strong likelihood of either a multi party coalition or a hung parliament. and that could mean that the mixed italian government could fall after a short time. >> okay. tina, thanks for that. stick around, joining us from citi. the american express earnings are announcing the up side ask the pound takes a hit after disappointing data sends fears through the market. and we'll get the results of whether this auction should be out as soon as we come back. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s.,
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we've got the auction results out of italy. i can tell you the auction growth yield, 1.85% on the december 2015 bond. they sold 3.5 billion. 3.5 billion was the maximum target. that yield 1.85% is the low since march 2010. it was 2 .5 in december 12th.
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the bid to cover ratio, 1.45, a little higher than 1.36. they've also sold 830 million of the deflating notes, as well, for the five-year floating note. and the yield on that, 2.17. a sharp drop from 4.56 in september last year when, of course, we were still fairly elevated. the bid to cover on 277. so, therefore, the results on italy, pretty good. 1.785% and a long way below the 2% level. so considering a good price for italy. they made more perhaps than 3.5 billion planned. people thought that they would do that. we'll get some reaction on that, but that may give euro/dollar a bit of a boost. indeed, the yield is going lower, 4.15% on that ten-year. we'll get some more chat on that in a few moments. first, commodity investors are
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awaiting eagerly today the usda report. according to analysts, the department of agriculture is likely to raise slightly its estimate for the 2012 soybean harvest, which is badly hit for the drought but is expected to cut its view for the corn crop to a six-year low. let's look at those two, then. first of all, soybeans. >> the soybeans number in a sense is likely to be less market news worthy as compared to the corn within. because we have had an increase in terms of u.s. soybean used over the course of the summer. so we're looking at the low since september. i think the bigger question is demand because demand from china has been extremely strong. we had the december numbers coming out which show that at 5.9 million -- chinese serving in force were at the second highest level in record.
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soybeans are likely to be a bit more on consumption, whereas the supply side i would agree that the u.s. numbers are likely to be revised modestly higher. >> what are the core numbers going to do for investors? >> i think the corn number is going to be the one to watch. that's reflected in price action. over the last couple of weeks, we have seen prices fairly subdued. in terms of production, i think what we would expect to see is the division lower in terms of corn harvest today. there was the worst drought in over 50 years in the u.s. last year and certainly corn brought the worst. so i think a lowering in terms of u.s. corn, but a big question mark for corn is going to be the demand picture. so unlike soybeans both in terms of domestic crush as well as exports are very well documented. in the case of corn, we have a handle over. similarly, the numbers seem quite weak. in terms over overall demand,
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it's not well covered. today's reports are going to give a good picture. and that's going to be the biggest factor. if you look back over the last couple of quarterly reports, most of these times, we've had corn trading either limit up or limit down. one can't overestimate and stress about how important today's figures will be. >> yeah. look, what do you think in terms of, you know, available acreage for corn? what do you think is going to happen? >> i think it is going to be in terms of the expected harvest ac acres. today's report is going to show the updated survey in terms of how much acres are harvested. i think the usda has been overstating that figure. in today's report, it is going to reflect that today's corn is higher than expected. we will see the numbers come in slightly higher than expected or in line with buyers. i think that could provide a lot
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of support to corn prices. one of to see demand being revised up. that basically means further in terms of ending stocks which are already extremely low. >> all right. thanks for that and joining us from barclay's. germany's economic performance declined sharply in the last three months of the year according to estimates from the economics ministry. it stressed that it expects the economy to arrive significantly this year. final word now from fordham. that's the outlook, very weak industrial production numbers we saw out of germany, as well. that's the outlook as we go into the german elections. how much is the eurozone crisis dictating what will happen for angela merkel and her coalition parter. >>. >> in contrast to what we've seen in other eurozone economies, angela merkel and her ruling csu party are at the peak of their power, even after having been in power for some years now.
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and that's quite remarkable. what it shows us is the ability of voters to support a politician most high approval ratings and at the same time they disapprove of a number of policies that they're implementing, specifically in terms of eurozone bailout. merkel is being rewarded, most obviously, for seem to go be tough on the conditions of those bailouts. at the same time, it's allowing them to take place. another, you know, undercurrent data is that the german economy has stayed in growth. and we think that's really important. where you see the anti-incumbent move has been in the last two years in countries that the direction of travel of the economy is negative. even if germany is barely in positive territory, it is there. >> presumably, they would like to avoid any activation, any more bailouts of anybody ahead of the elections. is that the way they see it? >> absolutely. merkel has always been a very
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cowerus politician. even the regional and provincial elections affected her willingness to address the greek bailout, you know, possibly even making the crisis worse. i think a national election, you would see that tendency increase. germany will want too void any bumps in the road between now and when elections are expected to take place at the end of september. >> they would let the ecb do whatever they can to talk the yield drn keep the yields where they are at the moment. >> and to postpone big decisions. >> thank you so much for joining us. still to come, earnings season is in full force, wells fargo reports in just a few hours. chef wron and american express are both out with werings. we'll break it all down for you.
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this is "worldwide exchange." american express surprises by preannouncing q4 earnings and unveiling its biggest cooperate overhaul in a decade starting by cutting 5,400 jobs. tech stocks are trading higher in europe led by nokia. and sap says it expects to surpass its long-term revenue target. shinzo abe feels the japanese economy, unveiling the country's
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biggest economic stimulus at the height of the financial crisis. but disappointing numbers point to a long, sluggish growth in britain, pushing the pound to a session low. thank you so much for joining us. i thought kelly would be with us today, but she's on squawk a little earlier. the highest yesterday since december 2007. right now, we are looking at a cautious start this morning, right now, trading two points below fair value. the nasdaq at the moment is pretty much, what, 1.5 points below fair value and the dow at the moment is just some 12 points below fair value. a fairly flat trading session is what we've had for the rest of
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global trading markets. the ftse cnbc global 300 is just up 2 points. european stocks, not a lot of directional movement. we have down one point on the ftse. .5 the points on the xetra dax. cac 40 down a little bit more. ibex down 10 points at the moment. we've had a fairly successful auction in the last ten minutes, as well. just to remind you, three-year auction yields come down to the low since march 2000. so what are investors to do with this bull run that we've had at the start of the year. here is a recap of some of the stocks that have been on cnbc today. >> banking stocks, italian banking stocks and in order the new issuance, as well, with the financial names are doing -- are seeing a very positive momentum.
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>> as long as we are seeing the initiative, we believe that it will support gold prices. >> we have had a very good run. if the markets are going higher, it's a higher stock and the most high beater stocks in the ftse 100 are the mining stocks. ultimately, they're the ones that will be joining the market task. >> american express has pre announced better than spektexpe numbers for the fourth quarter. wells fargo said fourth quarters earnings will be released at 8:00 eastern time. expected earnings at 88 cents a
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share. for the first of the major u.s. banks to report, citibank and others are coming out with their numbers next week. >> look, what is the expectation in terms of revenue growth and how much it might grow earnings? >> on the revenue side, wells fargo is expected to bring in 21.3 billion. and that's a 3% increase over a year ago figure. as far as earnings, analysts expect 88 cents, 88 cents per share and that's a 22% growth over last year and would mark the 15th consecutive quarter of positive growth for wells fargo. now, this separates them from a lot of the other big banks which tend to see their earnings string around quite a bit. wells fargo, on the other hand, is far more stable and this is, in large part, due to their
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focus on community banking and avoidance of some of the more riskier segments like brokerage and investment banking. >> and we've had this rebound in the housing market. are they earning fees now on refinancing? i mean, what's happening with -- as that happens and the lower rates? >> absolutely. the lower rates here in the u.s. have definitely contributed to an improvement in the housing market. prices are going up. new homes are being built at higher rates. and wells fargo is in a great position to benefit from this. you know, 60% of their revenues come from community banking and they're just in a great position. they weren't hurt as badly in the financial crisis as some of the other big banks. so they can take advantage of the some other banks that are shrinking or too highly levered to go after a lot of this mortgage business the.
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>> yeah. and can is that what they're doing? are they able to, you know, as you say, they suffered less. is that going to be the differential for them, that if this market improves, they can gobble up share? >> i think it is. you know, they're very focused on their core business of, you know, the community banking here within the united states. and i think that puts them in a great position. they're going after this, the mortgages and benefiting from refinancing, as well. there's a lot of refinancing activities going on, especially with some of the government programs in place to help people refinancing that might not otherwise qualify as well as raising the pricing in home values has people more able to refinance than a lot of others. >> they don't have the growth opportunity internationally.
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how much of an issue is that? or is the u.s. the place to be banking at the moment? >> you know, in previous years, companies have really wanted to focus internationally and try and raise those werings growth numbers. in recent quarters, that's switched and we're seeing, in fact, that the companies that are more focused on the united states are actually posting higher earnings growth than those getting more revenues from other parts of the world. as far as the current environment, it's a good place for them to we, focused on the u.s. even though our growth is not exceptional, it's still solid and better than other markets to be in. >> looking towards next week, morgan stanley, goldman sachs, bank of america out on thursday. what sort of growth rates are we going to see for these guys? how easy is the -- first of all,
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are they going the be flatted by easy xait comparisons? >> they're going to be very flattered by easy pairsons. there were a lot of eva chavrnlgs where the value of their bonds decreased. so they hurt a lot of their bonds. but sequentially from last quarter, it's not a large growth. 6/it's going to make them look a little better. >> what is going to be the key report for you or the key thing to focus on? >> as far as wells fargo, i would say what they have to say about the housing market. is it going to continue to be overheated? is it going to improve? this is something that affects not only the banks, but other
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parts of the economy, as well. we've seen in the consumer discretionary sector that especially the higher scale of any sector, and that's benefiting from the housing market, as well, as far as the home building, retailers that are showing the home applians, that sort of thing. and so it goes beyond just financials and their depends, being on the front lines of it, will definitely shed some light into other parts of the economy. >> thanks so much for joining us from thompson reuters. >> thanks for having me. now, the fate of superman remains with warner brothers and dc comics. the court of appeals says that the rights of the man of steel should stay with the studios and not with the estate of the pro creator. earlier we were asking you who is your favorite hero? one person tweeted rocky and
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bullwinkle. i'm not sure if scooby-doo is a super hero. he might be. kelly and i look fairly similar. i've got my bowl, hat and umbrella out fairly soon. we are bringing kelly back. it's just a two day journey. and my first super hilo. then i came up with this chap. hong kong fooey. anybody from the 70s and 80s might remember hong kong phooey. still to come, we'll climb to great heights to get a sneak peek of europe's highest viewing platform from the shard if the weather permits. more to come on "worldwide exchange." what are you doing?
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nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office. olaf gets great rewards for his small business! pizza! [ garth ] olaf's small business earns 2% cash back on every purchase, every day! helium delivery. put it on my spark card! [ pop! ] [ garth ] why settle for less? great businesses deserve great rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet?
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[ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it. there's a row as to whether
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monetary shift in deflation. the flu is expected to take major toll on the economy with experts predicting costs will far outpace the $10 billion seen last year. and if you're looking to drown out on the seasonal flu with a glass of cognac, not a bad idea, we're taking a look at some outrageously expensive liquor that might just do the trick. take a look inside the luxury liquor cabinet on all those stories on the website you can't ignore. meanwhile, in britain, the shard is going to open its doors to the paying public. cnbc took one of the elevators to the soon to be viewing level in the peak.
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>> the shard dominate tess london skyline and soon you'll be able to experience the bird's-eye view for yourself. doors open to the paying public on february the 1st. adult tickets will set you back 25 pounds. but organizers are confident they can attract a million plus visitors a year. >> you know, blasting into the 21st century. i think london is accepting to new thoughts and new technology. and from wa we've seen from the people of london, they're embracing the building. we have some detractors, but on the whole, it's very accepting. >> today, it's a little bit more wet than wow.
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building western's europe's tallest tower was nearly canceled back in 2008 due to a lack of funds. the state of qatar came to the rescue of 1.5 billion pounds of investment. since then, the only way to building was up. house ago five-star hotel, world renown restaurant and exclusive residential apartments, the architects dub it a vertical city. london is one of the key cities in the world. one of the things that was always lacking in the city was the ability to come up with a tall building and look down on the city in the same way as the eiffel tower, you can see paris, you can see new york, and this is a 21st century layer that has been added to the city. this is a sign of our times. >> and the visitors are already flushed with excitement.
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this would have to be the highest toilet in london. talk about a loo with a view. >> i don't know whether the height, though, might scare you off, doing what you have to do. anyway, there we go. that is the view of the shard from our offices here in london. it's a gray, misty, typical january day. it is certainly noticeable from the london skyline. there you go. if you were interested to know where it was in relation to st. paul's, now you do. director is having fun. let's recap today's headlines. american express surprises earnings to the upside as the company as more than 5,000 job cuts. japan announces a bid to jump start the economy. talking about the shard, the s&p 500 at a fresh five-year high.
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they're up 2,000 posting another record. so can the stocks particular on from here? we'll get the answers from chicago when we come back.
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ride now, good news out of saudi arabia. the king has allocated a 20% quota for women in shura council. so notable. meanwhile, let's take a look at some of the other stories we're following today. google search results in europe look set for a change.
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the eu competition commissioner has explained his ongoing investigation into the search engine's practices, saying he's convinced google is profiting byby diverting internet practices to certain businesses. he goes on to say if this is the case, that would mean google is abusing its dominant position. the fight between herballife and bill ackman continues. johnson alleged ackman's claim to give any earnings from the stock to charity was -- instead the company distorted, mischaracterized and ignored large portions of our presentation. herbalife down 1.7% yesterday. and ken given's fiscal hedge fund posted around 25% in its
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main investment funds in 2012 according to a letter to investors. the gains came from across the trading businesses, including stocks, energy and fixed income. 2012 a pretty rough one. 88% of them trailing the market, according to goldman sachs. . the average hedge fund posted a rough 6% gain last year, according to hedge fund research. and the problems continue to pile up for boeing's dreamliner after an oil leak and a cracked cockpit window were discovered on two separate flights in japan today. the latest incidents come ahead of a scheduled press conference from the federal aviation administration and the u.s. department of transportation. that's scheduled for 9:30 eastern. the uf of a is expected to announce a review into the aircraft's power systems after several mishaps on tuesday. 787 at boston's logan airport leaked around 40 gallons of fuel on to the tarmac a day after another airplane caught fire in
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boston. boeing stock? i'm not sure we have it. don't worry about it. the we're looking at the three-month chart on the nikkei. up 25.65% in the last three months. up another 1.6% today. shinzo abe announcing another stimulus bill suggesting the bank of japan should maybe think about adopting an employment target. but that nine-week consecutive bull run is the longest in japan since october to december, way back in 1988. so 1988 is the last time the nikkei was up nine weeks in a row. contrast that with european markets. today we've just turned into the green slightly for the ftse, the xetra dax and the ibex. only marginal. and as far as today's agenda in the united states, wells fargo, we spoke about it, the first of the u.s. banks to report earnings this season set for around 8:00 a.m. new york time.
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also due out, best buy will relace its holiday 2012 sales. at 9:30 eastern, the philadelphia fed president will speak at the new jersey economic leadership forum and at noon, the u.s. department of agriculture will release its final crop production report for 2012. traders will keep a close eye on the corn and is soybean harvest, also included in the report are the first predictions of 2013 feed demand. they like the crop report in chicago. i wonder if they like the s&p up at five-year highs? ben, good to see you, ben lichtenstein from here we go. the s&p up 40 and 66 level. what happens now? >> well, probably a continuation of the activity that we've been seeing. it's been a bit of a grind to the up side, though, ross. we've seen volatility reach lower levels basically below what the average day trader likes to see in terms of
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acceptable levels. we're seeing levels below 14. but for the most part, watching the russell, it weeks ago was into all-time highs. the s&p lagging as far as that goes. but we've been seeing the grind to the upside, as i mentioned. slow, sustained, higher-type trade and i think it should continue. it's not -- well, it doesn't appear to be weak shorts that have been trying to pick the market in getting out, which normally fuels this type of slow grind higher. i'm seeing open interests increase over the last few days as we've been seeing these higher price levels. so, again, there's conviction associated with the stock indices, but if you look at some of the other majors, like gold and the dollar, it's basically sideways. >> yeah. the fact that it's a slow grind high, is that going to pull or not? is that going to be other money. >>? because there will come a point when there's any slow move. you go, wow, hang on, when did that happen?
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>> no question. i think that that has already been occurring as we speak or over the last few weeks. if you look at where we are just four or five weeks ago, you know, right after the election, we're talking 1340. that was a huge convincing move to get back up into the 1400 level. and this is continuation right now. we're above last year's highs, above that 1461 level. even in the overnight session here, ross, we're seeing continuation up above yesterday's high print. so it seems to be attracting attention at this point, yes. and there is energy to the upside at this point, too, as well. >> ben, we're going to leave it there. thanks for joining us, ben lichtenstein, "squawk box" is coming up next. whatever happens, we hope you have a profitable day. and when you get there, enjoy the weekend. ♪ [ male announcer ] some day, your life will flash before your eyes.
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